tv Street Signs CNBC October 16, 2013 2:00pm-3:01pm EDT
agreement to exit tend borrowing authority and reopen the federal government. a live look at the senate floor where final passage could come tonight. >> the markets are happy, dow up by triple digits, was up by 200 points and the s&p a stone's throw away from cracking its record high all over again. to steve liesman with the beige book. >> yes. mandy the federal reserve's gauge of all the anecdotes on the districts finding that the economy expands at a modest to moderate pace. there are affects of the debate over the debt ceiling and shutdown. growth slowed in four of the 12 di districts and the debt debate along with the affordable care act. consumer and business spending and payrolls did grow in many districts. res kengsal real estate did improve. auto sales were strong and manufacturing expanded modestly led by aerospace and autos. retailers remained optimistic about the holiday shopping season and employment growth was modest.
employers were cautious however because of the affordable care act and the fiscal uncertainty. some of the specific comments. in boston the boston fed saying it was concerned the shutdown could dampen consumer spending. new york an employment agency reporting they couldn't hire people because they couldn't do background checks. and chicago manufacturers were worried their consumers and customers confidence could take a hit. we have impacts already on the economy from this debate and because we don't have the data it will be some time before we know how much of an impact it was. >> often that people poo-poo the beige book, this time it's important because it's the first real piece of sort of economic data or report if you will because of the shutdown, right? >> the lack of data from the shutdown meant policymakers and investors are flying blind. any report we get is going to be critical at this point until they do the catch-up and know where the economy is. that's why this thing is important to us. >> oasis in the desert. >> secret ballot on the beige
book, thumb up, down? >> i think it's a thumb sideways. we don't know what the impact is. growth slowed in four of 12 districts gets my attention but saying moderate to modest growth. still feels 2% but could be less. >> all right. to john harwood. everybody, including us, saying we have a deal. but the senate still needs to formalize it. are we out of the woods yet? >> i think we are or will be later tonight. i just got a message from a house republican leadership aide on the expected timing of the house action. we heard earlier that the senate expects to act some time between 5:00 and 8:00 tonight. house republican leadership aide told me we'll get to it 8:00 or 9:00, which means we walk off the floor after final passage around 11:00 p.m. that would be an hour, of course, before we get to october 17th which is when treasury says we'd run out of borrowing authority. i would expect very quickly after that vote around 11:00
p.m. that bill will go to the president and expect him to sign it tonight, not certain of that yet but i think that's likely to happen. >> okay. . we'll keep a close eye on what's going on there. in the meantime thanks for the update. john harwood. find out what the markets are doing in reaction to this. the dow shot up by over 200 points and as i mepsed at the top, the s&p is only about 6 points away cracking its all-time closing high. bob pisani what's the feeling on the floor of the stock market some. >> the big question now is now that the outlines of a deal where do we go from here? i think steve emphasized the beige book properly because that's the issue. how much damage has been done to consumer confidence. as mentioned in the beige book, concerns -- customers confidence could take a hit here. you want to see something, a real impact on the stock market today look at black and decker stanley, they came out lowered their full year guidance down 15% today and they did that partly citing the concern on the effect of consumer confidence
because of the government shouldedown. there's a company citing in part that some of the other big international industrial companies like massco and danaher, they're down in sympathy. this is not some kind of theoretical idea. we're seeing an impact on the stock market today from a company that specifically is saying that and mandy, the concern is other companies are going to use this as an excuse to aggressively lower estimates more than they might normally. that will be a big issue in the coming days. >> bob, i think people can look at the 172 points on the dow and say there was no big deal, no impact, but it's well to remember the dow jones was at 15,710 on september 18th and so all of this time we've been below that level. that's a month of lost time at a level that we will never get back. >> that's right. and remember, we have very high expectations for earnings in this quarter. as high as 10% earnings gross in the s&p. that's going to come down. it would normally come down. if it goes down to 5% everybody is fine. the worry is, they're going to use this as an excuse to take
the numbers down more aggressively. if it goes to 0, the market will react very negatively immediately and that's the worry right now. the fact that it's up nicely today, is not -- is nice but people are worried more about the earnings sgidsance in the next two weeks. >> if the dow goes to 0 i would be more worried about the zombies. >> i mean the earnings growth. >> let's bring in cnbc contributors. keith, how far has the old can been kicked down the old road? >> well, you know, this whole thing is a colossal overreach by the gop. we spent 16 days of having the government shut down. they didn't defund obama care, didn't delay obama care, didn't delay the individual mandate, didn't get a medical device tax repealed or delayed. they didn't get the employer contribution from members of congress or their staffs repealed. they got virtually nothing out
of this deal and caused this unnecessary connippion for the u.s. government and our economy. >> we got nothing out of it, still kicking the can down the road, is that your assessment of the situation as well, jimmy? >> if something positive came out of this, i believe look how the markets are reacting, the market did not want -- the market wants stability and the government to be functioning. >> you're missing it. something very positive came out of all of this. >> lay it on me. >> we've learned they need to elect better people. >> oh. >> i think fundamentally i think americans get the leaders we deserve. >> when the representative from florida got up the other day and
announced somehow wall street would clear and welcome the idea of a debt default, which he didn't think was going to happen, that was the epitome of nonsense. >> reflecting his voters. jump on him, but he's reflecting the views of the voters. >> yeah. i mean that's an interesting point, keith. i'm not just going to pick on the gop, okay, but to your point, there is most of that type of commentary the ones we heard were coming out of that side. what do you make about the argument that hitting the debt ceiling would have had no impact? >> you're asking me? >> keith, go ahead. >> yeah. i mean obviously all the economists and business leaders who looked at it have said the opposite. i mean -- >> trying to figure out where that line of thinking came from? >> debatable. a lot of people said because there's talk the government could prioritize who they pay and pay bond holders and not pay social security -- >> i can tell you where it came from. >> we hit the debt ceiling technically on may 17th.
what we've been doing is using extraordinary measures since that time to keep the government afloat. we've run out of tricks and have less than a day to figure this out. >> i can tell you where that comes from, a certain belief on the right that this whole economy is phony and artificial propped up by the fed and we need some sort of a ritual purification, major collapse to find out where the economy really is and then we can begin to rebuild the economy. i think that is absolute lunacy -- some people believe that. >> what's interesting if you read the fitch report last night and you don't read the political parts, just read the financial parts, those could be the sfnss you would expect in an upgrade of the economy. one of the things that's happened over the last several years is the finances of the u.s. government have improved and improved dramatically. the change in the deficit from 2012 to 2013 is the strongest we've had since 1969. okay. half the deficit.
now we still have a problem of debt to gdp. >> yes. >> being higher than 100%. >> and debt growth outstripping growth by far -- >> coming down to -- >> let me finish one over point. fitch points out 100% is lower than it was back when they last talked about this 2011 and still consistent with a aaa rating. put that in your pipe and smoke it. >> after he spoke following harry reid we've had the first period of double -- two-year deficit reduction, best year of two-year deficit reduction since the korean war. >> right. >> and you know -- >> two years. >> a lot of people have been saying that for some time now but nobody's paying attention to it. >> significantly it puts a lie to the notion of government spending bebeing out of control. at 20.8% government spending as a percent of gdp is on the 30-year average. >> that's the point i was trying to make. >> last word to jimmy and then
wrap it up. >> by the end of the decade they get tough. >> right. we saw a problem with entitlements. these good debt numbers, they're going to begin to reverse in a few years and we have to deal with. >> let's hope, guys. i think we can all agree, let's all come together, brady bunch style in this multi box look we've got, gdp growth needs to be better. >> focus on growth. >> let's not become japan because we're greece. >> larry summers was right. >> rack up the credit card and dish them to my 9-year-old. she'll be fine. i'll be retired. have a good evening. >> still ahead, couple years ago we called this the honey badger market. because it didn't give a -- it's back in full swing. >> later on bill gross will be joining us with his take on the debt default, the dysfunction in d.c. and every other "d" word you can imagine. what the board is doing for our listeners on the radio, a bright shade of green. we're up by 175 points there on the dow. the s&p is also moving higher
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badger market because it doesn't give a darn. we're going to keep going up up up even though the same longer term concerns, debt ceiling fights, earnings concerns, the dreaded taper, anybody remember that, are still out there. bring in diane, chief economist at mesereau financial and bob at neveen asset management. trying to approach it from a sideways glance, but what really has been resolved here? >> if we get the 11th hour vote tonight, we get resolution, continuing resolution with no solution. and that will stem some of the losses related to the direct cost related to the government shutdown but doesn't give us certainty at all about the winter months. talking to the national federation of retailers they are very concerned and going to be doing early promotions which will lower their profits during this critical holiday season and already, little bit data after the beige book cut, looks like
halloween was pretty mixed. there's still cautious optimism out there but retailers are being cautious with consumers going into this season. >> of course. >> bob pisani was saying moment ago, there are corporations that are going to end or are already using the shutdown and the uncertainty to lower their guidance perhaps more than they would otherwise. bob, okay, we might not have complete certainty through the winter months. we're going to do this all over again at the beginning of next year. y know how the market is lurches from headline to headline. what do we do in terms of the equity markets now? >> well, the resolution of the near term is definitely a positive. there were a lot of people, businesses, individuals, that were holding back, not knowing are we going to go over this big time cliff because we can't pay our bills. that's resolved. i know it's only pushed out in time. i would rather have a long-term solve as well. the facts are we can get back to business as usual whatever that means which means the focus now
appropriately will come back to revenue and earnings growth which is only mediocre and my guess is the park will have trouble making significant forward progress from here until we get visibility on stronger revenue and earnings growth which i think will examine but not right now. >> if i'm reading between the lines, market sideways or down over the next few months? >> i think we're in a consolidation period that's going to last a bit of time here. the market is up a bunch since last thursday when we began to head toward a resolution. it's not a surprise that -- up this much is a bit of surprise. might we give some back when the earnings come out, i suspect so. >> the dow up 17%, the nasdaq up more than 20%. saw stanley works express concern about the shutdown. any reason, can you make the argument for being the stock market right now? >> i can always make an argument for buying or selling the stock market.
that's not my job. should we be concerned about earnings in the fourth quarter and into 2014. we should be concerned about them and has the shutdown had an effect? it has. we don't know the full effect yet. i think the collateral damage will be larger than people expect. i'm not an alarmist or armageddon or doom sayer but to think about the economy going at a close to, you know, 1.7% over the summer and looks like that in in the fourth quarter that's not the reacceleration we were counting on. mortgage applications, down 1% for purchases from a year ago. that's not the direction we need to be moving in for housing and the spillover effects for the rest of the economy. and so you're seeing this slowdown in momentum hit an economy that had already had a bit of a summer swoon and that's going to be difficult. good news if you like the fed not tapering. they're not going to be able to until the earliest january. why will the fed not be able to taper? one visibility and the economy will be weaker than we thought. >> that's my question to you.
all of this means net, the fed is not go to be able to taper. i've seen as not until march of next year at the earliest. >> that may be the case depending on how bad the data is corrupted, we don't get data of the employment report at risk and may be gone. that's a complete black hole in the data forever and we don't -- compromises our data going forward as well. it's not an interesting four-letter word but it's critical for policy making and all we're getting is anecdotes and it makes these anecdotes seem so much larger than we should be and leaves the markets in an unclear path with the fog over them and that's going to be a difficult thing for financial markets. a lot of volatility. if you like volatility probably good news. if you don't, buckle up your seat belt and duck. >> bob, even with all the volatility, good companies out there, regenron, pioneer natural
resources. companies continue to do well. when you look at your list and strategies at knewveen, where do you see value? >> first of all i say earnings are at an all-time high. so the stock market would be too is probably not a mystery. i can complain about the pace of growth an just did a few minutes ago, but the facts are we're making forward groegs. you can find a lot of companies with positive free cash flow. i think the cyclical side of the economy, the growther side will continue to outperform the more defensive utility telecom areas because the economy is doing okay. diane is right, we saw some potential lift kind of post and around labor day that this unfortunate circumstance in d.c. has put a lid on but you think we'll see pick up. we're continuing to get less bad news out of europe and parts of asia are looking better. >> and, indeed, it's been those international equities the beneficiary over the past couple weeks. bob, thank you very much. diane, hope you've enjoyed your mini holiday in a data vacuum
that's going to come to an end as well. good things come in threes on "street signs." i thought they came in small packages. top earnings names three of them, in fact, to watch before they report. >> evil alter ego will be on earnings squad. >> mindy. >> that will be great. >> or manny. >> plus a threeway board for you. we're all over this d.c. fueled rally. dow up 168, nasdaq now is up 27% year-to-date. wow. we're back after this. with fidelity's options platform, we've completely integrated every step of the process, making it easier to try filters and strategies... to get a list of equity options... evaluate them with our p&l calculator...
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welcome, everybody, to the earnings squad where we dissect the stories everybody is talking about and to help you trade the stories you might have missed out, i'm mandy drury sitting in for melissa lee. joining you is dominic chu and dr. jon najarian, co-author of "how we trade option." let's hop to it and start with united health. the company is set to report tomorrow before the bell and this folks is a stock that's
already up about 38% year to date. we're expecting i think eps to be up about 2%, revenue up about 13% from a year ago. i think what's more important here is going to give us a bit of a peak from a big insurer's point of view into the health care overall. for example, how enrollments have been so far. it's a bellwether for the sector so that is where the devil is going to be in the details. >> so much optimism, right. the stock has been on a tear along with sigma, aetna, all those big guys. >> all the insurance, hospital stocks, cyh, hcas and so forth. >> which do you like in the sector some. >> i like the hospitals the best myself because i think these are the guys that will be paid under the affordable care act that presently have to provide services and wait months and months to get reimbursed for same. >> ibm reporting third quarter earnings after the bell today. so dom, what are analysts expecting? >> big blue is big blue. a reason they call it that. the bluest chip of the computer companies. last quarter they showed some
pretty decent signs of life here. the quarter before that, some perhaps weakness in service contract signings which is an indicator of future business. the last time around, they actually boosted their annual earnings forecast. what you're going to be looking for is whether or not we do see those bookings improve also whether or not profits are improving because of share buybacks and doing some cost cutting and savings at ibm. >> we call it big blue but how big is it? it's been vastly underperforming the market, down about 3% year to date. what do you think about it? >> two of the very successful women in tech, marisa mayer and the head of jeanne at ibm they're hitting it hard. marisa has had better wind at her back if you will because of ali baba primarily not because of the revenue growth. we'll see whether she can get it back going on track. >> also goldman sachs on debt to report tomorrow morning as well. what do we -- >> speaking of going on track. these guys are hitting on all cylinders. i believe this will be a very
good earnings report. i also believe you might want to step to the sideline after the stock pops up. i think it could get to about 175, 180 on this move but this is their first report as a member of the dow jones and i think they've retaken the 20 and 50 day moving averages. i think that's a positive, mandy. i would step back a little bit and say maybe i would rather own morgan after a pop in goldman sachs. >> how much is priced in. remember these are the best performing stocks in the s&p 500 so far today. >> as you say because it's now in the dow perhaps more critical to the market in terms of its earnings and market moves. thanks to both of you. thank you for joining us today. the earnings squad. if you want to join in the conversation, you can. tweet us at #earningssquad. brian, back over to you. >> dom, jon, thank you. mindy, thank you very much as well. terrific job. up next, warren buffett told us this morning that he thinks the banks may be in the best shape he's ever seen. a big stake in bank of america. does that mean it's a good buy for your port flol?
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in our view the default that the possibility of default on the part of the u.s. treasury is a million to one and perhaps even in the billions. >> that was pimco's bill gross on this fine program just two weeks ago and looks like he was right. bring him back in, bill gross, pimco founder and co-cio. tip of the cap to you. others were not panicking but getting nervous. did you find your own prediction a little worrisome, gosh, maybe i could be wrong as the days have marched on? >> no. we never did, brian. actually, you know, the treasury only had an interest payment on october 31st that didn't even really have anything to pay for the next two weeks. the october 17th was sort of a red herring, but we were buying treasury bills at 40 to 50 basis
points on a billion dollars as i've suggested before. does that mean a lot. a few thousand bucks but we're glad to buy them and pick up the pennies something an active manager should do. >> there was an interesting comment from ned davis who was saying essentially the bear market in bond has not begun yet but two of the four criteria or conditions in place, rising yield and weaker demand. what do you make of that comment? >> rising yields indicate a bear market. i suppose the question is how fast do they rise. certainly over the past three or four months they've risen. they rose because of the threat of a fed taper. at this point because of the, you know, debt crisis and the potential settlement in the next few hours seems to us because the economy has, you know, been subtracted in terms of gdp by perhaps two to three tenths in
this particular quarter that fed will take a look and see perhaps at their next meeting and not taper again. certainly, you know, this is a positive for interest rates in terms of maintaining low policy rates and ultimately keeping treasuries contained whereas in the past they have not been. >> well, we still have that dreaded "t" word out there and that's what i don't fully understand about this. i understand people sold stocks and look at the equity outflows into the billions, people did dump stocks in the last couple weeks. before this happened all we seemed to talk about was the fed ending qe as destroying stocks. that hasn't changed. >> no, i don't think so. i think the fed ultimately has to end qe. brian, they've been buying a trillion dollars a year of treasuries and mortgages and at some point their balance sheet as bill dudley indicated from the new york fed just a few days ago in a speech, their balance sheet won't stand that burden for the next three or four yiv
years. ultimately they have to taper. what's important in its place we think that janet yellen as the new chairperson will institute a policy of forward guidance which she guides forward the policy rate, the 25 basis point policy rate into late 2015, maybe 2016 and that stabilizes the front end of the treasury curve and what we've been buying. >> something else here. i want to bring up a tweet you sent out earlier today. i love the fact that it is you behind the things. i think i've seen that in los angeles. you said we put it up with the spelling. it's ratings services make news meaning i assume referring to fitch but seldom break new ground. think for yourself what dysfunctional d.c. means for treasuries and the dollar. not good. your tweet today. how bad do you think this could get for the dollar? >> it's hard to program this, brian, in terms of a dollar related number or even a yield
related number. i would suggest that, you know, perhaps treasury yields have gone up five to ten basis points because of this crisis, the past crisis, the crisis three to four months from now. who would buy a treasury bill in three to four months from now knowing another debt ceiling potential exists in early january and february and so, you know, yields have to come up in terms of the treasury bill market, they come up in terms of fives and tens and 30s and ultimately costs the u.s. government and taxpayers money. what is five to ten basis points mean on $15 trillion worth of debt. it means about $15 billion a year. it's a lot of in uny. i think ultimately not only treasury yields but the dollar itself have and will be affected by this, you know, types of shenanigans in washington. >> but the first part of that tweet was a little snarky, bill. you're saying essentially it's made headlines but do we really care what the ratings agencies do or say anyway. i think the message of a fitch
rating watch negative move last night was that no matter what you do, you know, you're only kicking the can down the road and still may get the downgrade. do we care? does the market care? >> well, we asked the same question, does it matter that the budget can and the debt can have been kicked down the road by three or four months respectively if it shouldn't to an astute long-term investor. dysfunctional washington appears to be a permanent disease that ultimately should concern longer maturity treasury investors as it to the volatility of washington's debt and, you know, it will never default explicitly but hair cuts come in a number of form including higher volatility and inflation. italy and spain are good examples of dysfunctional governments and their effect on bond markets and prices and we're beginning to see that in the united states. >> pimco's bill gross, always a pleasure to have you on our show. thank you very much for coming on. coming up, we'll be hitting the trading floors. also stocks on the move and doing street talk with the day's heavy hitters.
>> could there be more trouble for the boeing 787 dreamliner? interesting story from india you want to hear. first bill griffeth, i want to hear what's coming up on the "closing bell." >> the house gop caucus gets set to meet in a few minutes at the top of the hour. wouldn't you love to be a fly on that wall, what they're going to talk about. stocks are sharply higher but is this market heading higher once a deal in washington is complete? we're going to ask the man who manages more money than the fed itself, blackrock ceo larry fink back with us. ceos of honeywell and bmc software tell lawmakers from both sides of the aisle how the shutdown and debt ceiling threat have been affecting the economy. that and much more, maria and i look forward to seeing you. here we go again. should be a ruckus last hour of trade. see you then. stay tuned. the ocean gets warmer. the peruvian anchovy harvest suffers. it raises the price of fishmeal, cattle feed and beef.
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despite getting a nice target boost. >> the analyst raised their target to $40 from $30. that's a big jump. earnings beat by a penny, revenues in line. fourth quarter guidance week. the positive is that yahoo! holding on to more of its stake in alibaba. the cfo noting when it goes public it will provide more cash for yahoo!. some analysts see positive movement in the third-quarter results. stock up about 108% over the past year. >> and stanley black and decker. mentioned it earlier today, it's absolutely tanking. >> if we had a disaster dejour this is it. the company cut full year guidance, down from 540 to 565 a share. consensus at 544. big cut. cite slowing margins in the security business, weakening emerging markets, impact of the government shutdown, on organic growth. the stock is still slightly positive for the year about 6%. >> fedex sitting at a new 52-week high today.
>> this should be taken as more of a positive economic story than it is. transports considered a lead up 2% right now. buckingham research downgrading the stock but they increased their price target to 122. still below where the stock is. citing valuation on a name as you pointed out has had basically a spectacular six-year run. >> today's under the radar pick. it is mortgage insurance company mgic investment. >> this is an $8 stock. market cap of about $2.8 billion. mortgage guarantee insurance corp for you playing at home, posted its second straight quarterly profit this morning after six years of losses. they cite a better housing market, revenue came in above consens consenses. this stock unbelievable performer. moved higher, over 380% in the past year alone. up 220% year to date. thank you, housing market, courtesy of mgic. >> this is an interesting story, boeing shares hitting an
all-time high today, despite, brian, what looks like another setback for the boeing dreamliner. a body panel fell off one of the jumbo jets operated by air india as it was landing on saturday. to fiphil lebeau. the black eyes continue and the stock says no. >> people are looking at boeing long term both on the commercial and defense side, certainly the resolution of things in washington helps out the near term future for boeing on the defense side. the commercial side and what's happened with the dreamliner this is the report. a package of about 3 foot by 3 foot fell off the underbelly of a flight landing in banglor on saturday. found on the runway after landing. boeing said this is not a mission critical part of the plane. the company says the panel in question is the mid underwing to body bearing. it is located on the belly of the airplane on the right side and basically provides a more
aerodynamic surface in flight. nobody likes to see something fall off a plane when it is flying. air india replaced the missing panel, took it off of another 787 they have not put into service yet and put it on to the other plane. boeing won't say where the 787 in question was built, but this video here is interesting because the very first 787 dreamliner delivered was from the new boeing plant in charleston. we don't know if the one in question with this incident was delivered from charleston or everett. but there you see shares of boeing, nice pop today once the resolution was announced in washington. briefly trading at an all-time high. guys, back to you. >> we got to go. a nine square foot panel falling off a plane. >> that's big. >> they can minimize it all they want. that seems like a big deal. phil lebeau, thank you very much. . >> bank of america shares around 2% today after reporting better than expected earnings. results earned approval from none other than the legendary investor warren buffett. take a listen to what he told
becky quick on "squawk box" this morning. >> has done a terrific job. you mentioned i think you mentioned 1.6 billion of charge offs in the quarter and that's before the reserve release it sounds like. i don't think anybody expected charge offs a few years ago to be as low as they are now. >> so, should you put your money in bank of america? let us begin talking numbers. on the technicals, abby gal, on the fundamentals, john. john i want to begin with you. i understand buffet put his money in a couple years ago, got the stock on the cheap. at this price would you say this is a good entry point? >> oh, it's an unbelievable entry point. i think this is a fantastic stock that has to be bought here and one of my favorites and the reason why is primarily it's a cheap stock. it's trading at 11 times forward eps of 2014. i think you're looking at something that could run to 17 or 18. look at what's happening in
terms of tail winds that will drive this stock. the quarter wasn't bad but what's going to go forward is going to be improving de-leveraging of the u.s. consumer, number one, and number two, improving u.s. housing fundamentals, number two. and then just in general the debt ceiling debate, qe tapering being in the rearview mirror all of those are hugely positive. enormous opportunities to cross sell their products and leverage that fantastic platform they have and this is a capital return story that's unappreciated. >> making great points. the only thing i worry about when i look at a name like bac or jpm or whoever it might be, you could be one headline away from like a lead pipe to the knee, right? i mean regulators have been going after this company. don't you worry about the headline risks? >> i think the biggest headline risk has been litigation worries and expense. i think that's frankly in the eighth or ninth inning. the cost miss were on the litigation side. i think that's where the issues are. those are in the rearview mirror largely going forward and a
rerated stock poised to do much better in the future. this is one you have to buy. >> talking numbers, fundamentals and technicals. abby gal, what do the charts it tell you some. >> all good points by john but the charts suggest an important message, something important is happening here. and that is the idea that investors some investors who bought well a year ago or two years ago, below 10, they are starting to either think about taking profits or started taking profits. we know this when we take a look at the one-year daily. bank of america's one-year up trend is starting to reverse. this is no the a race for the exits. it's a subtle shift toward bearish distribution from bullish accumulation and another indication of this sort of profit taking, bank of america is 50 day moving average starting to round down. this tells us buying momentum is slowing. this is not a race for the exits, but people who bought really well below 10, they're take something chips off the table. i think it's important message for investors at home if that
profit taking excaccelerates in selling it would not be surprising to see the stock closer to 10 if not below 10 within a year. >> all right. a little more of a concerning note there. john stevenson loves it on the fundamentals. thank you both very much. for more technicals versus or in support of fundamentals check out the on-line version of talking numbers on yahoo! finance every single day. >> and still ahead, much more of the markets and, of course, the deal making going on in d.c. we are up triple digits off the session highs, but it will be the fourth time this month that we have been up by triple digits. don't go away. geoff: i'm the kind of guy who doesn't like being sold to. the last thing i want is to feel like someone is giving me a sales pitch, especially when it comes to my investments. you want a broker you can trust. a lot of guys at the other firms seemed more focused on selling than their clients. that's why i stopped working at my old brokerage and became a financial consultant with charles schwab.
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to take up the senate's plan and allow it to pass with dem votes. let's bring in robert costa, washington editor for "the national review" out of washington. congrats, good scoop by you. thank you for coming on. there's something called club for growth, conservative organization, that supports economic growth. they are asking congress members to vote no on this deal. do you think they've got enough pull to do that? >> it doesn't really matter at this point. a lot of conservative groups on club for growth are against this deal. boehner has agreed to still let it come to the floor, even if you doesn't have support of the majority of the republican conference. >> even if we get this deal, stamped, sealed, signed to reopen the government to avoid default, where do we go from there? it's quite a long path from here. you have a negotiation committee to sit down and try to work out a long-term debt solution. what more do we need to sort out from here and how long is it going to take?
>> the deal itself extends the debt ceiling until early february and reopens the government until january. between that period and now, we'll see fiscal negotiations between senate democrats and house republicans. who knows what that will yeeltd. we're heading toward further budget talks. >> where do you think it will yield? >> i think it could yield some kind of minor entitlement reform. the way that happens is chain cpi, for example, the way social security benefits are calculated, they could be traded for sequestration. beyond that, in a divided government, it will be difficult to get a big tax reform package. >> is it going to yield tax hikes? the white house has said this morning that everything has to be on the table, including revenue. >> that's very true. the white house, i think, for the rest of president obama's second term, will push for revenue. they know behind the scenes that house republicans, as long as they have the majority, will be very resistant to any kind of deal that has revenue.
it's important republicans are willing to put sequestration on the table. paul ryan said in his op-ed he would be willing to put sequestration on the table. >> thank you for coming on "street signs." good work, buddy. >> quick check. jpm is biggest winner on the dow today. joining us is art hogan. we've been asking a lot of our guests over the last couple of weeks questions like, you know, how do you position your portfolio for a default? how do you position for the uncertainty in washington, et cetera. how do we now position for a deal? >> it's interesting. it appears as we've got a deal, a frame wok for a deal to get done today or some time tomorrow. that's the good news. bad news is reality will set in quickly. we've been ignoring the earning season, which has been lackluster, and guidance has been lackluster, not surprisingly with the disarray in washington and backlog of
economic data. we'll get that two or three days after the government reopens. we don't know how much of an effect this disarray has had on economic development. we'll see if that plays a role in people's thinking on the market. that said, if you take the other side of the argument, you'll have to look at the fact that tapering has pushed off well into 2014 as a result of the fact we haven't set up fiscal policy yet and we're still in a bit of disarray there as well. >> we brought it back today, the honey badger market f you watch that clip. the animal tears up anything, doesn't care. some of the stats we dragged out here today, 24 of the 30 dow stocks are higher since the shutdown began. 96 of s&p 500 stocks are up more than 3% since the shutdown began. what do you make under what some were calling a severe crisis? >> the problem, i think what that spells is that investors are used to dysfunction in washington. they've seen this play out
before. they know we wait until the 11th hour. they know we eventually get a deal done. this has happened three times. i don't think anyone investing in this market feels like we'll go over and default on debt. unfortunately, the result of that, though, is another temporary fix here. this only moves to december. then in february for the debt ceiling. we'll have to either go through this process again, or as mr. costa was talking about, perhaps this sets the table for discussion on longer term debt situations, whether in tax reform or entitlement payments. if this sets something up where we have adult at the table, they can get clarity out of washington. i think that would be very much of a positive result. >> yeah, the adults here. a lot of investors haven't stuck around for the dysfunction. they've headed offshore. foreign stocks have been the beneficiary recently as people have been dumping out of u.s. stocks or mutual funds. you know, now it looks like a
deal is imminent. do you think we'll see that being reversed and that maybe we'll start to be the beneficiary and start outperforming in equities or is that not a scenario you see? >> that's a really good question. one of the reasons wasn't necessarily because you're getting out of u.s. because of dysfunctions or disarray, it's because multiples are high. if you look at chasing value, a lot of europeans are looking on multiple basis attractive while european news, or economic data out of europe, was stabilizing a bit. i think that was the chase there. and when you look at asian markets, which is in china, hanging in okay, and japan is certainly doing better, there were opportunities outside of the u.s. that looked better on multiple base than the s&p 500 did. >> art, very good to see you. hooray for adults. up next, where in the world is this man, brian sullivan, headed next? the answer when we come back. [ female announcer ] it's time for the annual shareholders meeting.
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they made, but how people can participate. some of the stats we have dug up -- >> mind blowing. >> are you going to be wearing your ears? they wheeled out the earless wonder all over again. >> aerodynamic. >> we're off the highs of the day but a great triple digit rally. "closing bell" will continue watching what's going on with that market right here on cnbc. thanks for watching "street signs." >> hi, everybody, we enter the final stretch. welcome to the "closing bell." i'm maria bartiromo at the new york stock exchange along with bill griffeth. we're seeing the market surge on hopes of a new debt ceiling dealing before the debt deadline. >> right now situations are fluid. senate is planning to vote on this bill in the next couple of hours here. meanwhile, house republican leadership is meeting right now. and the expectation is that house speaker